020853 US Studying Impact of Eliminating Farm Tariffs

Washington (Reuters) - In a move likely to raise concern among some U.S. farm groups, the Bush administration has asked for a confidential study on the impact of eliminating tariffs on farm goods from 33 countries in North and South America, an independent U.S. trade panel said.

The U.S. International Trade Commission said U.S. Trade Representative Robert Zoellick requested the study as part of the administration's effort to craft a free-trade zone covering every country in the Western Hemisphere except Cuba by the end of President Bush's term in January 2005.

In a letter to the ITC on Aug 16, Zoellick also asked the panel to assess the impact of eliminating, or at least reducing by half, tariffs on farm goods from the 143 fellow member countries of the World Trade Organization. The findings will not be released to the public.

The United States wants to conclude new world trade agreements covering agriculture, services, manufactured goods and other sectors by the same January 2005 deadline.

Zoellick's request covered scores of farm goods, including many highly protected items such as peanuts, sugar and orange juice. Dairy products, grains, oilseeds, tobacco, cotton, wool, beef, lamb, fruits and vegetables also made the list.

Agricultural negotiations are expected to be one of the most difficult areas of the proposed Free Trade Area of the Americas agreement, which would stretch from Canada to Argentina and also encompass the Caribbean.

The United States is under pressure in both the FTAA talks and the WTO negotiations to curb its huge domestic farm subsidies and provide more market access to farm goods from developing countries.

In a handwritten note at the bottom of his letter, Zoellick said the ITC studies would "keep us on track with the FTAA negotiations."

The ITC said it would deliver its report by Nov. 15.

It asked interested parties to submit written comments by Sept. 19, but said it planned no public hearings as part of the investigation.

The study will assess both the trade and the economy-wide impact of eliminating or reducing the tariffs.

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